Bunker fuel is the marine fuel used to power commercial ships. With global seaborne trade carrying over 80% of the world's goods by volume, the bunker fuel market is one of the largest petroleum product markets in the world, consuming approximately 250–300 million metric tonnes annually.
Bunker Fuel Grades
| Grade | Sulphur | Viscosity | Use |
|---|---|---|---|
| HFO 3.5% (HS) | ≤3.5% m/m | 380 cSt | Open sea (pre-IMO 2020, or with scrubber) |
| IFO 180 | ≤1.0% m/m | 180 cSt | Older compliance grade |
| VLSFO 0.5% | ≤0.5% m/m | Variable | Global IMO 2020 compliance standard |
| MGO (DMA) | ≤0.1% m/m | ≤11 cSt | ECA zones (Emission Control Areas) |
| LNG | ~0% | Liquid gas | New dual-fuel vessels |
Major Bunkering Hubs and Price References
- Singapore — world's largest bunkering port by volume
- Rotterdam — Europe's largest bunkering hub
- Fujairah — Middle East key hub, gateway to Asia/Europe routes
- Houston — US Gulf Coast reference
- Gibraltar — Atlantic/Mediterranean junction
Prices are published daily by S&P Global Platts and Argus Media, and quoted as $/MT for each grade at each hub. The Singapore VLSFO price and Rotterdam VLSFO price are the most widely referenced global benchmarks.
IMO 2020 Impact
The International Maritime Organization's global sulphur cap (IMO 2020) fundamentally restructured the bunker fuel market. Ship operators had three compliance options:
- Switch to VLSFO (most adopted)
- Install an exhaust gas scrubber and continue using HFO 3.5%
- Adopt alternative fuels (LNG, methanol, ammonia — early stage)
Frequently Asked Questions
- What is bunker fuel?
Bunker fuel is the marine fuel oil used to power ocean-going ships. It derives its name from the bunker tanks in which fuel is stored on vessels. The main grades are HFO (High Fuel Oil), IFO 180/380, VLSFO, and MGO (Marine Gas Oil).
- What changed with IMO 2020?
IMO 2020 (effective January 1, 2020) imposed a global sulphur cap of 0.5% on marine fuels, down from 3.5%. This drove a structural shift from HFO to VLSFO (Very Low Sulphur Fuel Oil) and MGO.
- What is the price of bunker fuel?
Bunker fuel prices are typically quoted per metric tonne at major bunkering hubs: Rotterdam, Singapore, Fujairah, Houston, and Gibraltar. Prices track crude oil with a discount factor and vary by grade.